"At least 10 fires were reported in Tokyo, where the subway system stopped, sirens wailed and people streamed out of buildings.

Japan sits on the "Pacific Ring of Fire", which is dotted with volcanoes, and Tokyo is situated in one of its most dangerous areas.

A tsunami warning was issued for Japan, Taiwan, Russia and the Mariana Islands, the Pacific Tsunami Warning Centre said.

"An earthquake of this size has the potential to generate a destructive tsunami that can strike coastlines near the epicentre within minutes and more distant coastlines within hours," the centre said in a statement.

It also put the territories of Guam, the Philippines, the Marshall Islands, Indonesia, Papua New Guinea, Nauru, Micronesia and Hawaii under a lower tsunami watch. Indonesia issued its own tsunami warning.

The quake sent the Nikkei share index plunging at the close while the yen fell sharply against the US dollar.

The mega-city of Tokyo sits on the intersection of three continental plates -- the Eurasian, Pacific and Philippine Sea plates -- which are slowly grinding against each other, building up enormous seismic pressure.

The government's Earthquake Research Committee has warned of a 70 percent chance that a great, magnitude-eight quake will strike within the next 30 years in the Kanto plains, home to Tokyo's vast urban sprawl."